The current industry moves are caused by brands being forced to minimize marketing cost while offering highly customized and personalized services that suit the needs of every channel. Large holding companies are mostly affected by this pressure, and cracks are starting to appear in their disintegrated business system. These business models are affected by several regulatory investigations and the current distrust of billing practices.
Consistent and Cost effective
The disadvantage of the holding company model is that owning various brands and agencies leads to increased overheads since the efforts of the administration are always replicated and units are stretched across many sites. It is approximated that top 5 holding corporations have overheads worth 10 billion.
Integrity and Transparency
Lack of transparency in the agencies is one of the things that tarnish the names of many brands. This can arise from internal competition and co-operation to the wild-west approach that causes client distrust. Clients want to know how their money is spent and the progress of their campaign, something that can be unclear for global campaigns. This issue causes inflation in the costs while many clients think that they are not told the truth. This is the main reason why many CMOs are coming up with in-house creative works.
Internal competition within the structure of an organization is one of the implied advantages of the holding company model. This can only be achieved when dealing with a single P&L and account team. The prosperity of one agency can negatively impact the success of the other especially when the P&Ls are in competition. This badly affects the need and spirit of collaboration for the client’s satisfaction since pressure from the management only focuses on the performance of a particular agency and not the general prosperity and growth of the entire group as a whole. Just to mention, the sharing of talent between different agencies should be embraced so that clients can benefit from the expertise and knowledge of different people. This can only be achieved when group finances decide to drop their rigidness and provide room for this flexibility.
Digitally native teams
Management that wants to have effective units in place should look for a way to reward various values in the marketing structure when it comes to internal talent. This can eventually enhance the sharing of ideas and talents across the agency. Hiring and backing unit members who have immense knowledge of digital customer experience and have been online customers can truly benefit the clients, especially when all the agencies are willing to work in harmony. Agency equality enables every channel to have the correct creative for their market and niche, rather than relying on TV advertisements.
Global/ world-wide delivery
Agencies should come up with amazing campaigns that can become complex on their own by minimizing their structural complexity. Lately, Barclaycard created an email campaign consisting of 1000 variants to make sure that the information suited to each customer. This is the type of complexity that agencies should be creating instead of the structural ones. This type of agency can be a reliable solution and can increase ROI at an affordable cost when the right technology is used.